Asian shares bounce after Trump’s victory as focus turns to the Fed
Shares recovered from early losses in Asia on Thursday after U.S. stocks stormed to records as investors wagered on what Donald Trump’s return to the White House will mean for the economy and the world.
Markets also were turning their attention to the Federal Reserve’s decision on interest rates, due later in the day.
Japan’s Nikkei 225 fell 0.3% to 39,381.41, reflecting worries over the potential for a revival of trade tensions under a Trump administration.
“I think everybody’s going to be worried about Trump’s tariffs because that’s one of the things in his playbook. And so we’ll have to see how things develop in the early stages of his presidency this time,” said Neil Newman, head of strategy for Astris Advisory Japan.
In Seoul, the Kospi finished nearly flat, at 2,564.63. Australia’s S&P/ASX 200 rose 0.3% to 8,226.30.
Chinese shares rallied after the government reported that exports jumped nearly 13% in October over a year earlier, the fastest pace in more than two years and far outpacing the 2.4% increase in September.
Hong Kong’s Hang Seng gained 1.6% to 20,863.30. The Shanghai Composite index was up 2.3% at 3,460.52.
Trump has promised to slap blanket 60% tariffs on all Chinese imports, raising them still more if Beijing makes a move to invade the self-governing island of Taiwan.
Investors are adding to bets built earlier on what the higher tariffs, lower tax rates and lighter regulation that Trump favors will mean. Higher tariffs on imports from China would add to the burdens Beijing is facing as it struggles to revive slowing growth in the world’s second-largest economy.
But the impact may be less drastic than feared, Zichun Huang of Capital Economics said in a report.
“We expect shipments to stay strong in the coming months –- any drag from potential Trump tariffs may not materialize until the second half of next year,” Huang said.
Still, higher tariffs on imports from China, Mexico and other countries would raise the risk of trade wars and other disruptions to the global economy.
Trump’s win raised expectations that Beijing may ramp up its spending and other stimulus to counter such trends. The Standing Committee of China’s legislature is meeting this week and is expected to announce further measures by Friday.
Francis Lun, CEO of Geo Securities, said domestic issues were a greater concern than tariffs. “People want the government to spend some money to boost the economy, instead of looking outward,” he said.
On Wednesday, the U.S. stock market, Elon Musk’s Tesla, banks and bitcoin all stormed higher, as investors made bets on what Donald Trump’s return to the White House will mean for the economy and the world. Among the losers the market sees: the renewable-energy industry and potentially anyone worried about higher inflation.
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